Plan to change workers’ comp rules for employees with COVID-19 angers business, ag groups
A proposed executive order from Gov. Gavin Newsom to substantially expand protections for coronavirus-infected employees who qualify for workers’ compensation insurance is raising concerns among leaders in the agriculture and business communities, who say it could cost billions of dollars.
Although few have seen a copy of the draft proposal, the details leaked out several days ago and industry groups have rallied to kill it.
The Governor’s Office did not provide any information about the proposal Thursday and Insurance Commissioner Ricardo Lara said Wednesday he was not aware of a pending executive order about workers’ compensation.
What many are opposed to is a recommendation that any essential employee who becomes infected with the coronavirus during the stay at home order will be covered by workers’ compensation insurance.
In California, all employers are required to carry workers’ compensation insurance in the event a worker is injured on the job. The insurance is paid by the employer and covers medical costs and disability benefits for workers who become hurt or ill. But before the insurance can kick in, the employee has to show the illness or injury was connected to work.
Under the proposed changes, that fundamental requirement would be eliminated for essential workers.
That means any COVID-19 illnesses or death sustained by essential workers — including farm workers, restaurant workers, health care workers and food processing workers — would automatically be deemed work-related and covered under workers’ compensation policies, according to the insurance industry group Independent Insurance Agents & Brokers of California.
The essential employees would be classified as having a “conclusive presumption” and not be required to prove their illness was work-related — as they would have in the past.
The Fresno Bee sent a list of questions about the proposal to the Governor’s Office. The answers to those questions were not returns as of Thursday afternoon.
Steve Young, general counsel for the IIABCal, said it is not uncommon for states to issue conclusive presumptions, especially for first responders.
“But it is almost unheard of for a governor to do it with an executive order,” Young said. “And assuming he has the legal authority to even do this, who is going to be covered by this presumption? That number could be huge.”
Ryan Jacobsen, executive director of the Fresno County Farm Bureau, said he first heard of the proposal a few days ago and he didn’t like what he learned.
“We really need to tread carefully on this one,” he said. “I understand the intent for this is to try and take care of the individual who contracted the COVID-19 virus, but we also have to be concerned about the impact this proposal will have on business.”
The financial impact could be huge, according to the Workers’ Compensation Insurance Rating Bureau of California. The agency examined the estimated cost of worker comp claims from health care workers, firefighters, EMS and rescue employees, front line law enforcement officers and other essential critical infrastructure (ECI) employees.
WCIRB estimates the annual cost of COVID-19 claims on ECI workers ranges from $2.2 billion to $33.6 billion, with an approximate mid-range estimate of $11.2 billion.
Ian LeMay, president the California Fresh Fruit Association, said his members are worried about the potential for their insurance rates to skyrocket if many of their workers become ill.
“We are wholeheartedly in support of protecting our employees, we want a healthy and available workforce,” LeMay said. “But we can’t put an undue burden on the business entity.”
Some farmers like Kevin Herman of Madera are taking a wait-and-see attitude. Herman grows almonds, figs, pistachios and other crops on 8,000 acres. At peak season he employs 500-600 workers.
Herman says he wants to know more about what the governor will do. He’s heard Gov. Newsom is considering whether employees would even have to be diagnosed or have the illness in order to be eligible for workers’ compensation.
“Well, the devil’s always in the details, as they say. I’m concerned about some of the things I’ve heard,” Herman said.
“I would be concerned about what that would do to the availability of my workforce. If there’s nothing wrong with them, why are they on workers’ comp? So, until we hear some of those details first-hand, not second-hand or third-hand, I’m concerned.”
This story was originally published April 24, 2020 at 5:00 AM with the headline "Plan to change workers’ comp rules for employees with COVID-19 angers business, ag groups."
